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U.S. will again review Dubai firm's ports bid

WASHINGTON — The Bush administration will conduct a highly unusual second review of potential security risks in a business deal the White House previously approved for a company in the United Arab Emirates to take over operations at six U.S. ports.

The 45-day investigation is aimed at averting a political showdown as Congress returned to Washington on Monday from a weeklong break.

"We think this is a good middle ground that has been found," said the White House press secretary, Scott McClellan.

The Senate majority leader, Bill Frist, who helped negotiate the plan, quickly recommended that lawmakers wait for the outcome before acting on legislation to delay or block the deal. Frist, a Tennessee Republican, said he expected hearings to continue this week.

In six pages of legal documents sent Sunday to the White House, DP World of Dubai offered to submit to a second, broader investigation of its plans to run shipping terminals in New York, New Jersey, Baltimore, New Orleans, Miami and Philadelphia.

The Treasury Department, which governs the U.S. review panel, said it would accept DP World's offer as soon as the company formally filed its request for one. It said the same government panel would reconsider the deal that it had already agreed unanimously posed no national security concerns.

Some senators, led by Charles Schumer, Democrat of New York, said they still intended to introduce legislation Monday to block the deal pending the 45-day review and to require congressional approval before DP World can conduct business in the United States. Under existing law, Congress effectively has no role considering such deals. Bush has said he would veto any measure to block the deal. "The president's position remains the same," McClellan said. After the review, it will be up to Bush to decide whether the deal takes effect.

Schumer said Sunday that he was skeptical of the review panel's ability to evaluate the deal, asserting that it has been focused on economic development rather than national security. "The bottom line is this group did a very cursory review" when it approved the deal, Schumer said on an ABC interview. "I'm a little dubious of this review, but let's wait, let's see the report and see what they say."

Still, the administration's announcement meant the White House probably would not face a broader revolt this week by fellow Republicans. The united Republicans can assert that its leaders have taken additional steps to protect national security.

DP World's offer was unusual. The secretive U.S. committee that considers security risks of foreign companies' buying or investing in American industry has conducted such full-blown investigations only about two dozen times among the more than 1,500 international deals it has reviewed.

The company said that during the renewed scrutiny, or until May 1, an executive in London, who is a British citizen, would have authority over DP World's U.S. operations. It pledged that Dubai executives would not control or influence company business in the United States, but said it was entitled to all profits during the period. It also said it would appoint an American to be its chief security officer in the United States.

"We hope that voluntarily agreeing to further scrutiny demonstrates our commitment to our longstanding relationship with the United States," said Edward Bilkey, the company's chief operating officer.

Bush has defended his administration's earlier approval of DP World's proposal to buy Britain's Peninsular & Oriental Steam Navigation Co. "The transaction was closely scrutinized by the appropriate national security and intelligence officials, and important safeguards are in place," McClellan said Sunday.

In the administration's earlier review, completed on Jan. 17, DP World agreed to cooperate with law enforcement investigations and to disclose many private business records on demand by U.S. agents.

The government panel unanimously approved the deal after an ordinary 30- day review, during which U.S. intelligence agencies reported they found no derogatory information about DP World in their files.

In its legal papers, DP World said it would abide by the outcome of the pending review, but indicated it could sue if the result was any different.

A critic of the ports deal, Representative Peter King, chairman of the House Homeland Security Committee, said the company appeared to invite the more thorough investigation sought by many lawmakers.

King, Republican of New York, said the proposal should be enough to delay immediate efforts in Congress to block the deal.